CNPC: China's energy demand to peak in 2040 as transportation demand grows

BEIJING (Reuters) — China's energy demand will peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption continues to rise through the middle of this century, state-owned oil major China National Petroleum Corp (CNPC) said on Wednesday.

Energy consumption in China, the world's second-largest economy, will peak then at 4.06 Bt of oil equivalent, up from the previous forecast of 3.75 Bt 5 yr prior, CNPC said in its annual long-term energy outlook. CNPC raised its forecast because it predicts transportation demand will rise through to 2050, twenty years longer than previously estimated.

China's oil demand will reach a ceiling of 690 MMtpy, equivalent to 13.8 MMbpd, by 2030, CNPC said. The country is the world's second-largest oil consumer. That compares with last year's estimate of a peak of 670 MMtpy by 2027.

Oil demand will grow at an annual rate of 2.7% until 2020, slowing to 1.2% until 2030, the report said.

The headline number indicates that Chinese energy markets will continue to set the pace globally. However, the slowdown in oil consumption raises further doubt about the future role of oil in China's energy mix as alternative fuels take a greater share of the transportation and power generation sectors.

Gasoline demand will peak as soon as 2025, CNPC said. That would mean China's gasoline demand would peak only shortly after the United States.

China has vowed to cap its energy consumption in 2017 in order to raise the use of cleaner fuels as part of a wider campaign to fight air pollution.

Clean energy, including renewable fuels and natural gas, will replace coal power as the largest fuel source for power generation by 2030 and account for more than half of the nation's power generation by 2045, it said.

Natural gas consumption will rise to 620 Bcm in 2030, said CNPC, up from 510 Bcm in last year's report.

Power demand will total 11.8 Tkw hours by 2050, the report said.

Annual crude output will remain around 200 MMt, or 4 MMbpd, until 2030, at which point it will start to fall. Gas output will reach 380 Bcm by 2050. At that point, China will account for around 15% of world's gas production, it said.

Reporting by Muyu Xu and Josephine Mason; Editing by Christian Schmollinger

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